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Commerce · Q669

Costing

Graduate and Post Graduate · Commerce · question 669

Q669

In a normal accounting period, allocated amount of indirect cost is 2000 and actual amount is 2200, then this is classified as

A.
over allocated budget
Answer
B.
under allocated budget
C.
under allocated indirect cost
D.
over allocated direct cost

Answer: Option A

Solution

Answer: Option A
Solution:
In a normal accounting period, allocated amount of indirect cost is 2200, then this is classified as over allocated budget because allocated amount is less than actual amount.